5 Apr

Consumer Staples Stocks: Stragglers in Q1

WRITTEN BY Amit Singh

Stocks that underperformed 

The consumer staples sector had decent gains in the first quarter. Most packaged foods companies, tobacco, and personal care product manufacturers had stellar growth in their stocks. General Mills (GIS), Conagra Brands (CAG), J.M. Smucker (SJM), Tyson Foods (TSN), and Mondelēz (MDLZ) shares rose 32.9%, 29.9%, 24.6%, 30.0%, and 24.7%, respectively.

Personal care product manufacturers’ shares including Procter & Gamble (PG), Colgate-Palmolive (CL), Estée Lauder (EL), and Coty (COTY) rose 13.2%, 15.2%, 27.2%, and 75%, respectively. Philip Morris (PM) and Altria (MO) stock rose 32.4% and 16.3%, respectively, in the first quarter.

Consumer Staples Stocks: Stragglers in Q1

Despite 10.5% growth in the first quarter, the Consumer Staples Select Sector SPDR ETF (XLP) lagged the benchmark index, which rose 13.1%. XLP generated lower returns than the Technology Select Sector SPDR ETF (XLK) and the Consumer Discretionary Select Sector SPDR ETF (XLY), which rose 19.4% and 15.0%, respectively, in the first quarter.

Weakness in Walgreens Boots Alliance (WBA), Kraft Heinz (KHC), and Kroger’s (KR) stock prices weighed on the consumer staples ETF. XLP invests ~6% of its holdings in Walgreens Boots Alliance, Kraft Heinz, and Kroger.

What’s impacting the stock prices?

Weak financial performances, more competitive activity, soft guidance, and business reinvestment needs are impacting Kraft Heinz and Kroger’s stock prices. Walgreens and CVS Health’s (CVS) stock prices are impacted by more reimbursement pressure on their earnings.

Latest articles

US crude oil production has more than doubled since 2009 and grew by 1.1% over the last year. Currently, there are 133 operable refineries in the US.

The cannabis industry is fighting against the ongoing US-China trade war and recessionary worries, which have hurt valuations across the global market.

Higher revenues, increased ticket prices, and lower fuel costs are likely to drive American Airlines' Q3 earnings higher despite its Boeing MAX woes.

HEXO plans to report its Q4 earnings before the market opens on October 24. October has been tough for Hexo, with its stock falling 31.2% as of October 18.

Today, Advanced Micro Devices (AMD) rose 4% to over $32, making it one of the top Nasdaq gainers. Morgan Stanley raised its price target for AMD stock.

Early in 2019, President Donald Trump warned that China could overtake the US as a global power. He vowed that this would not happen under his leadership.